OPEC ups forecasts for global oil demand for 2017

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In the wake of the hurricanes Harvey and Irma, oil demand is expected to drop by some 900,000 bpd this month, Goldman Sachs said on Monday.

Hurricane Irma knocked out power to almost 5.8 million Florida homes and businesses on Sunday after millions were told to evacuate ahead of the storm. It gradually lost strength and weakened to a tropical storm by Monday morning as it headed towards Georgia.

West Texas Intermediate crude for October delivery rose 59 cents to settle Monday at $48.07 barrel on the New York Mercantile Exchange.

Spot gold is down 0.8 per cent at $1,335.10 an ounce while U.S. gold futures for December delivery is down 0.9 per cent at $1,339.40 an ounce.

OPEC and other producers including Russian Federation pledged to reduce output by about 1.8 million barrels a day through March to trim global oil inventories and buttress prices.

And U.S. export terminals were badly affected by the storm which cut crude exports to just 153,000 barrels per day in the week ending on Sept.1 compared with 902,000 bpd the week before.

OPEC continues to grapple with oversupply owing to a ramp up of production in Nigeria and Libya - the two OPEC members exempt from the oil cut deal agreed by OPEC and non-OPEC producers in late 2016.

In a monthly report, the Organization of the Petroleum Exporting Countries said the world would need 32.83 million barrels per day (bpd) of OPEC crude next year, up 410,000 bpd from its previous forecast.

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Even so, USA crude stockpiles are likely to build in the next few weeks as refiners try to catch up with the backlog of oil stranded during the storms of the past two weeks, analysts said.

According to an S&P Global Platts preview, EIA data could show a build of 10.1 million barrels for crude oil, but a drain on gasoline stocks of 4 million barrels.

The deal to curb output propelled crude prices above $58 a barrel in January but they have since slipped back to a $50 to $54 range as the effort to drain global inventories has taken longer than expected.

Weekly U.S. inventories data will be able to shed some light on the hurricanes' impact.

Aside from total USA crude stockpiles, oil centered in the Cushing, Oklahoma hub, which stores supply meant for delivery against WTI contracts, has abeen rising.

After Hurricane Harvey halted nearly a quarter of the nation's refining capacity, crude prices in NY slumped as gasoline prices soared.

Mark Zandi, the chief economist at Moody's Analytics, said the USA economy could suffer lost revenue from the storms and the estimate for third-quarter gross domestic product could drop a half point to 2.5 percent as a result.

Ministers are discussing extending the pact by at least three months.

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